CLA-2-39:RR:NC:SP:221 H88767
Ms. Alison Ray
PCS Customs Compliance
Motorola
2001 North Division Street
Harvard, IL 60033-3674
RE: The tariff classification of non-working display cell phones from Taiwan.
Dear Ms. Ray:
In your letter dated February 19, 2002, you requested a tariff classification ruling.
You have submitted samples of display model cell phones. The models are non-working units that are used as displays in retail stores that market cell phones. To discourage theft, the display models do not contain any circuitry and are therefore unable to function as cell phones. They are designed to resemble the actual cell phones as closely as possible, with the same size, shape, weight, keyboard configuration and lens design. In order to replicate the weight of the missing circuitry, the display models have a special pocket molded into them containing a piece of specially designed and weighted steel. The models are intended to demonstrate to a potential customer the touch and feel of the cell phone for which they are the models, since the size, weight and feel of a cell phone are often deciding factors for a consumer.
You suggest classification in subheading 9023.00.00, Harmonized Tariff Schedule of the United States (HTS), which provides for instruments, apparatus and models, designed for demonstrational purposes (for example in education or exhibitions), unsuitable for other uses. The Explanatory Notes to the Harmonized Commodity Description and Coding System constitute the official interpretation of the HTS at the international level. The display phone does not meet the requirements for classification in heading 9023 as outlined in those Explanatory Notes because it is not a reduced or enlarged model and it is not used to explain or teach any principles. Rather, it is designed to show consumers their purchase options.
The applicable subheading for the display non-working cell phones will be 3926.90.9880, Harmonized Tariff Schedule of the United States (HTS), which provides for other articles of plastics, other. The rate of duty will be 5.3 percent ad valorem.
In the alternative, the display cell phones may be eligible for duty free treatment under subheading 9811.00.60, HTS. This subheading provides for the free entry of any sample valued not over $1.00 each, or marked, torn, perforated, or otherwise treated so that it is unsuitable for sale or for use otherwise than as a sample, to be used in the United States only for soliciting orders for products of foreign countries.
The controlling factor under this statute is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. The purpose behind the importation and distribution of the samples must be the stimulation of sales through exposure for public consumption.
When the items are valued at more than $1.00 each, as is the case with these display phones, they may not be entered free of duty under subheading 9811.00.60, HTS, unless they are marked as samples or treated in some way to render them unsuitable for commercial sale or any use other than as samples for obtaining orders for similar articles. The replacement of the circuitry with the specially designed and weighted steel is a treatment that renders the display phones unsuitable for use other than as samples for obtaining orders for similar articles.
As long as the display model non-working cell phones represent the actual cell phones to be ordered, as long as the actual cell phones are produced in a foreign country, and as long as the display phones are used in the United States to solicit orders of the foreign-made cell phones or stimulate demand for them so as to increase future orders, then the non-working display phones are eligible for duty free treatment in subheading 9811.00.60, HTS.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Joan Mazzola at (646) 733-3023.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division